1. PGP-CEM 2013-14

2. PGP-CEM 2013-14
BUSINESS CREDIT
CARDS
ASSET BASED
FINANCING
LONG TERM
LOAN
SHORT TERM
LOAN
LINES OF CREDIT
TYPESOFSMALLBUSINESSCREDIT

3. PGP-CEM 2013-14
 Firms following informal
business practices
 Inability to maintain collateral
 Lack of credit worthiness and
goodwill
 Lack of transparency due to
poor reporting of firm data
 High processing cost
GENERALCHALLENGES

4. PRO’S
• Expense tracking
• Higher limits
• Cards for
employees
• Builds business
credit record
• Added
protection
• Special perks
• Extra benefits
CON’S
• Personal Credit
Issues
• High Priced
Financing
• Less Purchase
Protection
• Security Issues
BUSINESSCREDITCARDS
PGP-CEM 2013-14

5. ASSETBASEDFINANCING
PRO’S • Injection of
Capital
• Increased
Purchasing
Power
• Low interest rates
• Faster loan
approvals
• Advantage for
lenders
CON’S
• Commercial
lenders may not
deem sales to
individuals or
small businesses
as "eligible
receivables."
• More expensive
than traditional
loans
• Third party gains
control cash flow
PGP-CEM 2013-14

6. OVERDRAFT
PRO’S •Flexible- Time
•Pay as per use
•Quick
•No
prepayment
charges
CON’S
•Cost
•Recall
•Security
•Requires one
to have a
current
account
•Has to be
rearranged
regularly
PGP-CEM 2013-14PGP-CEM 2013-14

7. OVERDRAFT&CASHCREDIT
PRO’S •Flexible- Time
•Pay as per use
•Quick
•No
prepayment
charges
CON’S
•Cost
•Recall
•Security
•Requires one
to have a
current
account
•Has to be
rearranged
regularly
PGP-CEM 2013-14

8. SHORTTERMLOAN
PRO’S •Economical
•Flexibility
•No
interference in
management
•May also
serve long-
term purposes
CON’S
•Fixed Burden
•Charge on
assets
•Difficulty of
raising finance
•Uncertainty
•Legal
formalities
PGP-CEM 2013-14

9. LONGTERMLOAN
PRO’S •Lower Rates
•Interest Costs
•Cash Flow
•Budget
CON’S
•Face
foreclosure or
repossession of
the property
•Prepayment
charges
•Long term
liability
•Exit strategy
issues
PGP-CEM 2013-14

10. PGP-CEM 2013-14
THANK YOU
Credits:
Abhijeet Verma NA 13001
Abhilasha Jaju NA13009
Kushal Pachisia NA13030
Mayank Baid NA13031